What's Going On With Semtech Shares Tuesday?

Semtech Corporation SMTC shares are moving higher on Tuesday after the company reported better-than-expected third-quarter earnings Monday after the close.

The Details: Semtech shares have soared nearly 20% on Tuesday after the company reported financial results for the third quarter of fiscal 2025. Semtech reported third-quarter adjusted earnings per share of 26 cents, beating analyst estimates of adjusted earnings per share of 23 cents.

Semtech reported net sales of $236.80 million, beating analyst estimates of $232.06 million, according to Benzinga Pro. The company said $43.1 million of its revenue was generated from data center sales. Semtech also reported gross margin of 52.4% and adjusted EBITDA of $51.1 million.

The company issued strong guidance for the fourth quarter. Semtech sees revenue of $245 million to $255 million versus analyst estimates of $242.03 million. The company anticipates earnings between 29 cents and 35 cents per share versus analyst estimates of 27 cents per share.

“Our reported results and outlook demonstrate leverage in our operating model, targeting healthy net sales growth along with prudent spending,” said Mark Lin, Semtech’s executive vice president and CFO.

“We reported positive operating and free cash flows, and consistent with our previously stated capital allocation priority, we made principal prepayments on our credit facility in both the third and fourth quarters of this fiscal year.”

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Analyst Changes: Following the earnings report, multiple analysts issued price target adjustments, which appears to be adding to the momentum in Semtech shares Tuesday.

• Needham analyst Quinn Bolton reiterated a Buy and raised the price target from $50 to $70.

• Piper Sandler analyst Harsh Kumar reiterated an Overweight and raised the price target from $60 to $75.

• Stifel analyst Tore Svanberg maintained a Buy and raised the price target from $58 to $65.

• Benchmark analyst Cody Acree maintained a Buy and raised the price target from $56 to $82.

• B. Riley Securities analyst Craig Kennison maintained a Buy and raised the price target from $61 to $85.

SMTC Price Action: At the time of writing, Semtech shares are trading 19.3% higher at $63.74, according to data from Benzinga Pro.

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